France's Constitutional Council on Friday upheld a law banning fracking, the controversial process used to extract shale oil and gas from the ground.

The use of the technology known as hydraulic fracturing was banned in France in 2011 because of environmental concerns and the legislation led to two research permits that had been granted to a Texan company being withdrawn.

The company, Schuepbach, challenged the legislation on the grounds that the withdrawal of the permits represented an excessively rigid interpretation of the legislation. But the Constitutional Council rejected their arguments, ruling that the law provided for a blanket ban and should be applied to even limited exploratory drilling.

"This decision means the ban on hydraulic fracturing is comprehensive and absolute," Ecology and Energy Minister Philippe Martin said, hailing the decision as a "legal, ecological and political victory."

Fracking involves the high-pressure injection of water, sand and chemicals into rock layers deep below the earth's surface in order to release hydrocarbons.

The technique is already widely used in the United States where it has generated a boom in cheap energy and has been credited with transforming the competitive position of US industry, helping to keep huge numbers of jobs from disappearing to lower-cost countries.

Some European countries like Britain are seeking to follow the US lead, but exploratory drilling projects have run into fierce resistance from environmentalists, who fear fracking can lead to seismic instability and the contamination of water sources. The pro-fracking lobby insist such claims lack any supporting evidence.

France's Socialist government, which came to power a year after the fracking ban was introduced, has resisted pressure to repeal it, despite mounting concern over high energy prices and unemployment, both of which could potentially be eased through investment in shale projects.

British Prime Minister David Cameron warned in August that Europe was in danger of "missing out big time" on the shale revolution.

The way North American shale production is transforming the global energy market was underlined on Friday by figures from the International Energy Agency, which forecast that the United States would become the biggest oil producer outside the Organisation of Petroleum Countries (OPEC) grouping by the second quarter of next year.

Schuepbach had also argued that the ban on shale drilling was discriminatory since fracking remains authorised in France for geothermal energy projects. The council rejected that argument, saying it involved a different form of fracking and did not present the same environmental risks.